Nevada dual corporation strategy
Tuesday/August/19 21:06 Filed in:
corporate strategySam runs a very successful pipe bending business in Los Angeles.
Sam runs a very successful pipe bending business in Los Angeles. Sam’s
company is a California S-Corp and Sam is looking for a way to legally pass
some of his profits to Nevada to cut out some of the tax he pays in California.
Sam formed a NV Corporation with an office package and Nevada Management
Services that would act as a Management Consulting Company to his California
business. Sam then had a contract made for services between the two
businesses and had his Nevada Corporation invoice his California S-Corp
$10,000 per month for Management Consulting Services. This strategy allowed
Sam to upstream $120,000 in income over to Nevada allowing him to eliminate
roughly $12,000 in state business income taxes. (10% tax in California)
Note: Sam must have profits in his business and not need these profits for his
business operations in CA to make this strategy work.
Tags: dual corporation strategy, interstate commerce, multi-state taxation, upstreaming